Inequality worse now than on ‘Downton Abbey’

Welcome to ‘Downton Abbey’ America

U.S. fans of the hit British TV series, whose latest season ended last night, may think they are looking through a window at a lost world of privilege and poverty, aristocrats and servants, “upstairs” and “down.”

But they should think again. A research paper to be presented this week at the National Bureau of Economic Research, a leading think tank, will confirm that the U.S. today has become as unequal as the England of the Earl of Grantham, Lady Mary, Daisy the kitchen maid and Carson the butler a hundred years ago.

PBS/Masterpiece

In the U.S. today, the top 0.01% enjoy wealth well beyond what Lady Edith and her ilk possessed in the 1920s.

The richest take home a higher share of national income in America today than did the aristocrats and superrich of 1920s England. The poor today take home a smaller share than the butlers, chauffeurs and other working folk did back then.

Peter Lindert, economics professor at the University of California in Davis, and one of the world’s leading experts in measuring income inequality, will be presenting research at the NBER this week, and he shared his thoughts with me by email. “Britain’s Downton Abbey economy of the 1920s,” Lindert says, was slightly “less unequal than…the U.S. today” (emphasis added).

For example, he points to the so-called GINI Coefficient, the standard measure of economic inequality used by researchers and organizations around the world, from the Census Bureau to the World Bank. U.S. readings today are about as high as those of 1920s England, says Lindert. They may even be higher.

Incidentally, other research has found that U.S. readings of the GINI coefficient are higher than those of Czarist Russia as well.

People can always raise questions about individual bits of data from history, so I decided to do a bit more digging.

According to historical data on income inequality tracked by the Paris School of Economics, the richest Americans take home a much higher share of our national income than did the Earl of Grantham and his pals. The richest 0.01% of Americans take home 4% — compared with 3% in 1920s England.

(The richest 0.1% earn 9% of the national income in America today—the same percentage earned by the richest 0.1% in 1920 England.)

Meanwhile the bottom 90% of Americans—i.e., most people—receive just 50% of the national income in aggregate, according to the Paris data. In the England of Downton Abbey they earned 60%.

People can draw their own conclusions—just read the inevitable comments section below this article—but it is at least important that we deal with accurate perceptions.

We can watch period dramas all we like. But we have a huge servant class of our own in this country. According to a study by the Congressional Research Service in 2012, the poorest 50% of Americans own, in aggregate, just 1% of the national wealth.

Half of our country are just like Daisy the kitchen maid or Thomas the scheming footman a hundred years ago. They basically have nothing.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.